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Q3 2012 Earnings Call
November 01, 2012 5:00 pm ET
Stacy Ybarra - Director of Corporate Communications
William J. Ruckelshaus - Chief Executive Officer, President, Director and Member of Mergers & Acquisitions Committee
Eric M. Emans - Chief Financial Officer, Principal Accounting Officer and Treasurer
Ned Davis - Wm Smith & Co.
James T. Dobson - The Benchmark Company, LLC, Research Division
Previous Statements by BCOR
» InfoSpace's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» InfoSpace's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» InfoSpace's CEO Discusses Q3 2011 Results - Earnings Call Transcript
Good afternoon, and welcome to Blucora's Third Quarter 2012 Earnings Conference Call. Before we begin, I'd like to remind you that during the course of this call, Blucora's representatives will make forward-looking statements including, but not limited to, statements regarding Blucora's expectations about products and services; outlook for future of our business and growth initiatives; and anticipated financial performance for our fourth quarter 2012 and tax season for the first half of 2013.
Other statements that refer to our beliefs, plans, expectations or intentions which may be made in response to questions are also forward-looking statements for purposes of the safe harbor provided by the Private Securities Litigation Reform Act. Because these statements pertain to future events, they are subject to various risks and uncertainties and actual results could differ materially from our current expectations and beliefs.
Factors that could cause or contribute to such differences include, but are not limited to, the risks and other factors discussed in Blucora's most recent annual report on Form 10-K, on file with the Securities and Exchange Commission.
Blucora assumes no obligation to update any forward-looking statement, which speaks only as of the date the statement is made. In addition, during this call, our management will discuss GAAP and non-GAAP financial measures. In the press release, which has been posted on our website and filed with the SEC on Form 8-K, we present GAAP and non-GAAP results along with reconciliation table and the reasons for our presentation of non-GAAP information. We have also provided supplemental financial information to our results in the Investor Relations section of our corporate website at www.blucora.com, and filed with the SEC on Form 8-K.
Now, I'll turn the call over to Bill. Following his comments, Eric will review the third quarter results and fourth quarter outlook. Then, we'll open it up to your questions.
William J. Ruckelshaus
Thank you, Stacy. We are pleased to report Blucora results from our third quarter of 2012. We had another great quarter. Total company revenue for the period was $92.9 million. Adjusted EBITDA was $12.1 million, and non-GAAP net income was $10.4 million.
Our second quarter results reflect strong performance from the InfoSpace search business. Search revenue for the third quarter was up 62% compared with the prior year, driven primarily by growth in our distribution network. Search distribution continued its positive momentum, posting 78% growth versus 2011. We are encouraged by the performance of the distribution network and believe that cornerstones remain intact for a continued growth in this area.
As another search provider, we aggregate content from multiple sources to create a differentiated search experience for users and our partners. Our unique position in the marketplace, coupled with our long-standing experience providing flexible implementation and high service levels to our partner network, is a core advantage in winning distribution customers. And newly signed customers have significantly contributed to our momentum upswing in the past 5 quarters.
InfoSpace also represents a growing trusted distribution channel for our search partners. We've been in business with Google and Yahoo! each for over 10 years. We distribute the content and results of our search partners across owned and operated properties and now more meaningfully across our partner network. We operate in accordance with search partner policies and best practices. We introduce new distribution opportunities for our search partners and drive liquidity in their overall keyword marketplaces.
Our search business is defined but this mutually beneficial relationships with our search partners and we keep their interests at the center of our future growth plan.
Looking ahead at the next quarter and beyond, we continue to see opportunity in search distribution. We do expect our year-on-year growth to slow in distribution beginning in Q4 of this year, as year-over-year comparisons become more difficult. But we continue to invest in product features, content development and platform enhancements to evolve our solutions for partners. Additionally, we are increasing our investment in mobile, so that we are prepared to capitalize on new opportunities as mobile search continues to develop.
Moving now to our cash preparation business, the market opportunity remains strong as we continue to see a secular shift to digital do-it-yourself within the tax-preparation market. TaxACT is well-positioned to leverage this trend. We remain bullish on the space and we are leaning forward with additional investments for the coming season and beyond.
During this offseason, we spent time understanding our customers to help them inform our product enhancements going forward. Our DDIY customers are smart; they want quick, simple solutions; and they increasingly want access across desktop, tablet and mobile devices. We're making numerous investments to the product in key areas, including improved content, additional support services and new mobile offerings. I want to spend a few minutes discussing these initiatives.